David Koch Steps Down From Company, Political Groups

David Koch Steps Down From Company, Political Groups

WASHINGTON—Billionaire businessman David Koch, who along with his brother has used his fortune to help reshape Republican politics, announced Tuesday that he is retiring from his family-owned company and all political organizations.

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A letter to Koch Industries employees from its Chairman and Chief Executive Officer Charles Koch attributes David Koch’s decision to deteriorating health. The letter cites an undisclosed health issue that put him in the hospital in the summer of 2016.

“We are deeply saddened by this, as we miss David’s insightful questions and his many contributions to Koch Industries,” the letter says, according to a copy reviewed by The Wall Street Journal.

David Koch, 78 years old, has long served as vice president of Koch Industries and been active in Republican politics, conservative organizations and philanthropic groups. At the center of the Koch brothers’ political influence is their network of like-minded, typically libertarian or conservative, wealthy Republican donors.

The pair’s network grew from 12 people at their first conference in 2003 to more than 550 at a retreat earlier this year near Palm Springs, Calif. Each attendee gives at least $100,000 annually, money used to fund scholarships, startup company investments, institutions, and political and policy groups.

Most of the policy and political operations are conducted through Americans for Prosperity and Freedom Partners. James Davis, spokesman for Freedom Partners, said in January that such groups plan to spend as much as $400 million in 2017 and 2018 to help elect Republicans and promote policy issues such as free trade and the tax legislation signed into law late last year.

“David has contributed greatly to Koch Industries and improving people’s lives in this country,” said Steve Lombardo, chief communications officer for Koch Industries.

Koch Industries is one of the country’s largest private corporations, employing more than 120,000 people across 60 countries, according to the company’s website. It operates refineries and manufactures paper towels, carpets and many other products. Mr. Koch was “instrumental in building” the company’s chemical technology group, Charles Koch’s letter said.

Mr. Lombardo said David Koch’s involvement in business and political activities has been increasingly limited in the past two years. “Given declining health, it was time to resign.”

The Kochs’ activism and campaign spending have long made them a political lightning rod. Democrats and their allies have pointed to the Koch brothers in pushing for limits on such spending. In his Democratic National Convention speech in 2016, Sen. Bernie Sanders (I., Vt.) argued that wealthy donors, such as the Koch brothers, “spend hundreds of millions of dollars buying elections and, in the process, undermine American democracy.”

Mr. Koch’s political involvement traces back to his stint as vice presidential candidate on the 1980 Libertarian Party ticket.

After starting the seminar group in 2003, Charles and David Koch became a force in Republican politics. Through contributions to Americans for Prosperity, they helped fuel the tea-party movement during then-President Barack Obama’s first term.

“This is a huge loss for us,” said Tim Phillips, long-serving president of Americans for Prosperity.

Koch groups made opposing and then repealing Mr. Obama’s health-care legislation their signature issue in recent years. Their organizations spent more than $200 million on that fight.

Related video: Obama on Koch brothers at White House correspondents’ dinner (published April 25, 2015)

They have quietly opposed many of President Donald Trump’s statements, particularly about immigration, and didn’t directly contribute to his 2016 presidential run. Mr. Trump hasn’t attended any of the Koch-related events.

On Monday, Koch-backed groups announced a multimillion-dollar campaign to oppose Mr. Trump’s tariffs on imports.

The Kochs’ political activities sometimes came into conflict with their business goals, particularly when their company dabbled in media. When Koch Industries explored buying Tribune Co.’s newspapers, including the Los Angeles Times and Chicago Tribune, in 2013, the talks sparked protests and were ultimately dropped.

Earlier this year, Koch Industries launched an advertising campaign during the Olympics and the Super Bowl to correct what Mr. Lombardo called “misperceptions” by people who primarily associated the company with its owners’ conservative politics. The ads focused on the company’s principles, including integrity and entrepreneurship, he said.

Mr. Koch was diagnosed more than two decades ago with prostate cancer and has since “made it his mission to help find a cure for prostate cancer in his lifetime,” according to his biography. He has donated to cancer groups and funded research on prostate and other types of cancer.

The biography says his David H. Koch Foundation has given more than $1.3 billion to cancer research, public policy, education and other groups. Additionally, through his company, he has given another more than $300 million to “worthy causes, including relief efforts for victims of Hurricane Harvey.”

Write to Julie Bykowicz at julie.bykowicz@wsj.com

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